By Nigel Morris and Sharif Sakr
BBC London News
LPA owner Sam Morre (right) denied any business link with CMS Mortgages
As the housing market slump accelerates a BBC London investigation has exposed a network of mortgage brokers willing to help illegal immigrants get home loans
Our investigation began after we were approached by three former trainee mortgage advisers employed by the London Professional Academy (LPA) based at an office block in Barking.
The company is owned by Ghanaian businessman San Morre.
The LPA trainees were sent to various companies including - CMS Mortgages - which operated from LPA's headquarters during 2007.
While at CMS Mortgages the former trainees allege that they were:
- Instructed to falsify the passport details of foreign nationals
- Instructed to put down "British" in the nationality box on mortgage application forms if the client was a foreign national
- Instructed to get chartered accountants to create ghost companies and incomes to make low paid, foreign clients look like prime borrowers
On May 9th, a Somalian-born undercover journalist, hired by the BBC, telephoned LPA to arrange to see a mortgage administrator - Jacqueline Folson.
When the journalist met Jacqueline he told her he was an illegal immigrant with no ID whatsoever.
Undercover journalist: "But I can trust you? Because it's difficult for me to... I can't just tell anyone... Ok?"
Undercover journalist: "…I'm an illegal..."
Our fake illegal immigrant, who wanted a 95% mortgage, then explained that he had no official ID.
Adviser: Alright, ok. So you don't have any form of identity at all.
Undercover journalist: No, unfortunately not.
We showed our undercover footage to mortgage expert Ray Boulger, who also sits on the board of the Association of Mortgage Intermediaries.
He said: "Because the client has admitted he has no valid ID and what she should have said then is - in that case I cannot help you. Because I have got to prove your ID to satisfy money laundering requirements for my firm and the lender."
But instead of showing our journalist the door the adviser told him - "We'll see what we can do."
Our bogus illegal then crucially told the adviser that he had no bank account but this did not deter the mortgage administrator either.
Mortgage administrator: "I can speak to somebody and they can help you to open a bank account. And I will give you a call."
Undercover journalist: "And how can they help me without ID?"
Mortgage administrator: "I will speak to them to see if they can do it without ID."
Mortgage expert Ray Boulger said:"To suggest that she can get this documentation for this particular client to allow him to open a bank account without him going into the bank clearly means she is quite prepared to break the anti-money laundering regulations in order to help this client get a bank account."
After the meeting Ms Folson handed our journalist a business card.
But the card did not say LPA. In fact the company name on the card was CMS Mortgages 'authorised and regulated by the Financial Services Authority.'
The business card raised a number of questions
A quick check of the FSA public register and we discovered that CMS Mortgages was 'terminated' as a regulated FSA company in November 2007.
We showed the CMS Mortgages business card to our expert - Ray Boulger.
He said: ""That is absolutely staggering. That means for the last 7 months this firm has been trading illegally and if the FSA become aware of that they will take very strong action."
The firm that regulated CMS Mortgages on behalf of the FSA was Network Data Ltd. They told BBC London that they had ceased to work with CMS Mortgages due to their "quality of business".
Network Data Ltd also told us: "Following a business review we have decided to terminate CMS Mortgages. Whilst we couldn't find specific evidence, there are links to, and similar patterns to, other recent cases where we have had to terminate firms for fraud."
CMS Mortgages was "on paper" a separate company run by a Kenyan businessman, but all three trainees told BBC London that the real boss of the company was a Ghanaian called San Morre.
During 2007 there was over £2.5m worth of mortgage business on the books.
One former LPA trainee, who worked for CMS Mortgages, told BBC London that accountants would charge just £750 to certify bogus incomes.
He has provided BBC London with a list of 30 accountants used by CMS Mortgages.
In one example a West African, non-skilled worker, earning £18,000 became a self-employed executive earning £74,000. These accounts, according to the trainees' testimony, were certified by an accountant who knew it was untrue.
Trainee A told BBC London: "We sent the accountant a fax saying we needed an investment income of £50,000. So then the accountant put on his letterhead that my client has an investment income of £50,000 and was able to support the mortgage.
"They certify it that this is the amount she had and she can support the mortgage."
According to LPA trainees they were always instructed to put "British" on the mortgage application forms of foreign clients.
Trainee A told BBC London: "On the original application, they always used to disclose as British even though they were not British - they were from Uganda, from Nigeria. And they told me to mention on every single application that the client was British.
"And sometimes I challenged them and said this is not right, because I want to be trained as a good advisor, and what you are doing is not the right way, so I was feeling uncomfortable."
Mr Morre told BBC London through his solicitors that he had "no control, influence or connection" over CMS Mortgages. He said the LPA business relationship with CMS Mortgages "is that of Landlord and tenant".
He also said that:
- The administrator caught on film, Jacqueline Folson, was a CMS Mortgages employee and that the room where Jacqueline conducted the interview on 9 May was rented to CMS Mortgages
- That the owner of CMS Mortgages "had never been employed by London Professional Academy (LPA)"
- That Jacqueline Folson had never worked for LPA
He added that LPA were not involved in using accountants to make false certification of earnings, and Mr Morre denied being engaged in such "irregular and fraudulent practices".
Mr Morre, through his solicitors, has always maintained that there was no business link to CMS Mortgages.
BBC London has now obtained evidence of payments running into thousands of pounds from Mr Morre to the boss of CMS Mortgages.
Some of these payments are from the same business account from which Mr Morre paid his own LPA trainees.
Payments were also made to the boss of CMS Mortgages from other companies owned by San Morre.
The report will be broadcast on BBC1 at 1830 BST on Monday 4 August.